Government Considers Merchant Fees for Large UPI Transactions

The Indian government is considering a merchant discount rate of 0.3-0.5% on large UPI transactions to cover system costs, potentially ending a decade of free digital payments.

While 23.6 billion transactions worth 29.87 trillion rupees occurred in July 2026, officials state that person-to-person payments and small business transactions will remain free.

Proposals under discussion target transactions above 2,000 rupees at large merchants, which account for 67% of total payment value but only 4% of transaction volume.